Commissioner Ferrero-Waldner to visit Israel
and the Palestinian Territories 19/20 June

The Commissioner for External Relations, Benita Ferrero-Waldner will
visit Israel and the Palestinian Territories on 19/20 June 2006. During her
trip she intends to meet Israeli Prime Minister Ehud Olmert and Foreign Minister
Tzipi Livni, as well as Palestinian president Mahmoud Abbas and other leading
figures on both sides. She will not meet any member of the Hamas-led government.
At the request of the Quartet (EU, US, UN and Russia) Commissioner
Ferrero-Waldner has spearheaded efforts to develop proposals for a Temporary
International Mechanism to facilitate the direct delivery of assistance to the
Palestinian people to meet basic needs, without the money passing to or through
the PA government. Now that these proposals have won the approval of the
Member States of the EU, she looks forward to discussing the new Mechanism with
all parties. During her visit talks will also focus on the current political
situation and prospects for a return to dialogue leading to a negotiated
two-state solution.

On the eve of her visit the Commissioner said: “This is a delicate
moment for all parties. There can be no progress on any front without
dialogue: between Israel and the Palestinian President; and between the
Palestinians themselves. That is why we urge early contact between PM Olmert
and President Abbas. It is also why we urge the new Palestinian government to
unlock the door to a peaceful future by renouncing violence, recognising Israel
and accepting previous obligations and agreements, including the
Roadmap”.

She added: “We Europeans are determined to play our part in preventing
a humanitarian crisis in the Palestinian Territories. But there can be no
business as usual with a government that has not yet accepted the fundamental
principles of peace. It is for this reason that we have worked hard to develop a
Mechanism that will meet some basic needs without money passing through the
government”.

The Mechanism is open to all donors, and could be used by Israel to channel
withheld Palestinian tax revenues.

The Mechanism will cover essential supplies to the health sector and payments
to health care service providers, utilities including fuel and basic needs
allowances to meet the essential needs of the poorest segments of the
population.

President Abbas’ office will act as interface for the donor community
in the operation of the Mechanism, signing and authorising all necessary
documents.

Assistance will be channelled through a three part structure:

1) The Emergency Services Support Programme (ESSP) of the World Bank will be
expanded to cover essential supplies in the health sector and basic allowances
to those who are providing care in hospitals and clinics. While implementation
procedures are being developed, the European Commission will co ordinate with
the World Bank in providing immediately and directly allowances to the health
care sector employees form the community budget.

2) The Interim Emergency Relief Contribution (IERC) of the European
Commission will be reinforced to ensure uninterrupted supply of essential
utilities such as fuel.

3) A Needs Based Allowance Programme will be developed as quickly as possible
to create a “social safety net”. A fund will be established to make
payments direct to individual bank accounts on the basis of need.

Parts one and two of the Mechanism will be launched immediately, with the aim
of launching payments to individuals by early July. The aim is to have part
three of the Mechanism functioning as soon as possible. All three will operate
with strict controls in full accountability and transparency.

Since the Hamas-led PA government came to power, the European Union has
suspended direct aid to or through the Palestinian Authority. It has, however,
expanded its assistance to help meet Palestinian basic needs. €154
million has been made available since the beginning of 2006, which includes
€64 million for the United Nations Relief and Works Agency, €40
million to ensure uninterrupted power supply; and €34 million humanitarian
aid. Despite the suspension of direct aid announced earlier in the year, the EU
remains the biggest donor to the Palestinians.

The EU recently held a very successful Association Council meeting with
Israel in Luxembourg. As well as political issues, the meeting focussed on the
early successes of the EU-Israel Joint Action Plan under the Neighbourhood
Policy which is playing an important part in deepening the bilateral
relationship